Fitness Fanatics is a regional chain of health clubs. The managers of the clubs, who have authority to make investments as needed, are evaluated based largely on return on investment (ROI). The company's Springfield Club reported the following results for the past year: Sales $750,000
Net operating income $15,000
Average operating assets $100,000

Required:
Compute the Fitness Fanatics’s return on investment (ROI).

The Fitness Fanatics’s return on investment (ROI) is 15%.

Explanation:

Return on investment (ROI) can be computed as the ratio of the net operating income to average operating assets as expressed in percentage as follows:

ROI = Net operating income / Average operating assets (1)

Where, for Fitness Fanatics, we have:

Net operating income = $15,000

Average operating assets = $100,000

Substituting this into equation (1), we have:

ROI = $15,000 / $100,000 = 0.15, or 15%

Therefore, the Fitness Fanatics’s return on investment (ROI) is 15%.

whole quiz

1. the sum of all activities involved in getting high-quality products into the marketplace

2.operations

3. the principle of looking at the supply chain as a whole in order to improve the overall flow through the system.

4. produced; performed

5. activities producing tangible products, such as radios, newspapers, buses, and textbooks.

6. activities producing intangible and tangible products, such as entertainment, transportation, and education.

7.   customer focus

8. analyzing a competitor's products to identify desirable improvements

9. the systematic direction and control of the processes that transform resources into finished projects that create value for and provide benefits to consumers.

10. operation management.

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